Looking at the Long term!
Customer Loyalty – A Long Term Business Strategy
Loyalty outperforms quick wins
Nowadays, the industry is focussing more on customer experience management with the ultimate goal of customer loyalty. It costs a lot to replace a lapsed customer; the sales process, the incentives required ... Whereas if you can retain existing customers and build on your relationship, it's beneficial to both sides.
Research has shown that customers can sometimes be irrationally loyal – your competitors may have a cheaper product or state-of-the-art technology but if your service is better or they share your brand values then they may well stay with you.
If that's not enough to convince you, here are some interesting statistics:
The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics.
For every customer complaint there are 26 other unhappy customers who have remained silent –Lee Resource.
A 2% increase in customer retention has the same effect as decreasing costs by 10% – Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.
96% of unhappy customers don't complain, however 91% of those will simply leave and never come back – 1st Financial Training services.
A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people – White House Office of Consumer Affairs.
Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affair.
In today's hi-tech world, expectations have changed. What used to add the wow factor is now taken for granted. Good service should be a given. But how many companies consistently get it right? According to Chris Daffy, direction has to come from the top and good service needs to become an ethos within the company. The culture needs to reflect it and the brand values must be aligned. In other words, you need to treat your staff how you want them to treat their customers. It's no good talking about "teamwork" and "taking responsibility" if you only reward individuals and don't empower them to make decisions.
It pays to walk the talk
So you need to make sure you "walk the talk" and consider how you can treat your staff well so that they can do the same for your customers. Align company values with those of your brand and reward and recognise people for going the extra mile – build it into your company culture and ensure it starts at the recruitment process. Hire for the attitude, train to it and reward and recognise at every opportunity. You'll find it a virtuous circle; it's better for your people, better for your customers and better for the bottom line, as research by Defaqto recently found: 55% of customers would pay extra to guarantee a better service.